Social media giant Twitter (TWTR) reported fourth quarter earnings that missed analyst expectations across the board, but also announced that it plans to buyback $4 billion of its own stock.
News of the share buyback program led investors to disregard the disappointing financial results and sent shares of Twitter 4% higher in premarket trading.
Twitter reported earnings per share of $0.33 U.S. versus $0.35 U.S. that was expected by Wall Street, according to Refinitiv data. Revenue in the quarter amounted to $1.57 billion U.S. compared to $1.58 billion U.S. that had been expected.
Monetizable Daily Active Users on Twitter totaled 217 million in Q4 versus 218.6 million that was anticipated. The company provided revenue guidance for the current first quarter of $1.17 billion U.S. to $1.27 billion U.S., while analysts had expected $1.26 billion U.S., according to Refinitv.
Twitter also announced a new $4 billion U.S. share buyback program, half of which will be an accelerated share repurchase with the remaining being repurchased over time.
The company said in a written statement that its previously stated goals of reaching 315 million Monetizable Daily Active Users by the fourth quarter of 2023 and at least $7.5 billion U.S. in annual revenue in 2023 remained the same.
The earnings report is the first since Twitter founder Jack Dorsey stepped down as the company’s chief executive officer (CEO) last November so that he can focus more on cryptocurrencies.
Twitter said that macroeconomic challenges such as supply chain disruptions and high inflation are leading to less advertising on its platform, which hurt its latest financial results.
Twitter stock finished yesterday’s trading session (February 9) at $37.83 a share, down 42% over the past six months.
